CAP Error and Dishonesty Tracker

Refutation:Not true. David Koch has never been on the board of the National Institutes for Health. He was appointed by President Bush to the National Cancer Advisory Board in 2004 and served his full-term which expired in June 2010. Furthermore, the National Cancer Advisory Board never evaluated the carcinogenicity of formaldehyde when Mr. Koch was a board member.

Refutation: Nope. Futures contracts, swaps and other financially settled products can be used to offset purchases of oil against price changes. They are not inherently speculative. And there is little evidence that today’s high gas prices are due to speculation rather than the Obama Administration’s energy policies.

Writing for the CAP, Lee Fang’s piece “How Koch Became An Oil Speculation Powerhouse,” claims futures contracts are evidence of excessive speculation that is driving gas prices upward. His proof…a Goldman Sachs report misquoted in a Reuters article. According to Fang, “Goldman Sachs concedes that at least $27 of the price of crude this year has been a result of rampant speculation, not supply and demand.” The Reuters article was later corrected after Goldman Sachs disputed the Reuters calculation on speculative premium. Fang used this quote anyway.

Refutation: False. ThinkProgress reporter, Lee Fang, repeats overheated charges made in the left-wing magazine The Nation regarding a letter sent to Koch employees who had given to KochPAC before the 2010 mid-term elections.

Not only did the letter not instruct this self-selected group on how to vote, the letter clearly stated, “…deciding who to vote for is a decision that is yours and yours alone, based on the factors that are important to you. Koch and KOCHPAC support candidates we believe will best advance policies that create the economic conditions needed for employees and businesses such as ours to survive and prosper.”
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Refutation: Before being elected to Congress, Mike Pompeo was president of
Sentry International, a maker of equipment used in oilfields. He is no longer associated with Sentry. According to Fang, “Sentry International is a partner to Koch Industries through its Brazilian subsidiary, GTF Representacoes & Consultoria.”

In fact, GTF, a Portuguese company, is a manufacturers’ representative in Brazil. It represents a variety of manufacturers, including Koch Heat Transfer Company, aKoch entity, and Sentry. GFT is not Koch’s “Brazilian subsidiary.”

“Kansas-based Koch, which operates paper mills and coal transportation firms in the state, vehemently denied any interest in buying or leasing the state facilities.

As it turns out, the potential buyers for the small power plants are much closer to home — including investor-owned utilities in Milwaukee and Madison. In recent investor presentations, Wisconsin Energy Corp. listed the potential acquisition of state energy plants as the first of several investment opportunities it is considering.”

Refutation: Not so much a mistake as rank hypocrisy. The Center for American Progress Action Fund is a 501(c)(4) tax-exempt political organization that is not required to reveal the names of its donors. By his definition, CAP accepts “secret donations from individuals and corporations.”

Between $500,000 and $999,999 of CAPs funding comes from Wal-Mart (funding CAP describes as “right-wing corporate money” in the same article)

Refutation: The photos in the above Think Progress post do not show Koch Industries’ office nor do they show the small number of demonstrators that Think Progress actually turned out to participate in its Koch obsession. The photos are of the main AFL-CIO demonstration, at another location. Two or three hundred people stopped at the Koch office on their way to the main AFL-CIO demonstration.

Refutation: While a small number of people booed the headline “Theater audience boos” is misleading. Fang’s post was based on a Financial Times articles which states the following:

The excitement started even before the show when David H. Koch, the co- owner of Koch Industries, the largest privately-own industrial conglomerate in the US, came out on stage to talk about his $2.5m sponsorship of the production. Most people applauded but there were also boos from near where I sat in the balcony, followed by an angry debate in the row in front of me, with one of the booers declaring “he’s an evil man” and a couple next to her telling her to “shut up” and to leave the theatre. [...] Once Mr Koch had left the stage, the booing stopped and the ballet started.

Refutation: These hateful accusations not only misrepresented The Washington Post’s story but also falsely labeled two individuals as racists. Jennifer Rubin at the Washington Post responded to these accusations with the following:

[W]hile AFP and the Tea Party are fairly vigorous, remember that the school board was thrown out by an election. Or does Think Progress think the people of Wake County are dullards, simply led around by the nose by the mind-controllers in the Tea Party? Don’t answer that.

Refutation: Fang fails to mention that Pompeo’s opponent was Raj Goyle, a senior policy analyst for the Center for American Progress which employs Fang and contributed to Goyle’s campaign. While Pompeo has garnered support from KochPAC and some Koch employees, it is because of Pompeo’s personal support for free market principles and policies, which also are supported by the people of his district as evidenced by his landslide victory with almost 60% of the total vote.

Refutation: Contango is not market manipulation. On the contrary, it is the natural state of most markets. It simply means that at a given time, the price of a forward or futures contract is trading above the present spot price. This is what you would expect, given the time value of money. Occasionally, for various reasons, this usual condition may not hold; then we have what is called “backwardation.” A contango market has nothing to do with any expectation; rather, if the futures price is higher than the spot price, as is normally the case, it is a contango market.